JSW Steel Ltd is entering into an equal joint venture with JFE Steel Corporation of Japan to manufacture grain-oriented steel sheets, which find use in the electrical industry.

The downstream unit will come up at Vijaynagar, Karnataka where JSW operates a 12 million-tonne steel plant. While the companies did not disclose the investment, industry benchmark suggests capex in the range of Rs 5,000 crore.

Cold rolled grain oriented (CRGO) steel sheet, ideal for the cores of power transformers, is fully imported to India. This JV will be the first company to produce this speciality steel in India. The raw material — hot rolled coil — for CRGO to be made at the JV, will be produced at Vijayanagar.

JFE Steel is a strategic investor in JSW Steel, holding a 15 per cent stake in the company. The strategic alliance between the two companies kicked off in 2009.

A memorandum of understanding for a joint feasibility study was signed in May 2021. The study has since been completed and both, JSW Steel and JFE Steel have in principle reached an agreement to establish a 50:50 JV.

Jayant Acharya, joint managing director & CEO of JSW Steel, said, “The JV would further strengthen JSW Steel’s position as India’s leading manufacturer of advanced steel products that lead to reduced CO2 emissions, and create sustainable steel solutions.”

Global demand for high-grade electrical steel sheets is expected to continue to increase with the electrification of automobiles, the desire for more efficient energy use, and expanded utilisation of renewable energy, JFE said in a statement.

Acquisition

A subsidiary of JSW Steel has acquired downstream steel company National Steel and Agro Industries Ltd from the bankruptcy court for Rs 621 crore. The company which makes cold rolled coil galvanised corrugated sheets and colour coil had a turnover of Rs 815.04 crore in 2021-22.

Following the acquisition, NSAIL will be delisted from bourses. The financial creditors are going to recover Rs 612 crore from the resolution.